2011-05-31-2011-05-16-2011-05-16

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
40MM
Description

Acquired 90% WI in 21 wells in Panola County, TX, 100% WI & 75% WI in 2 S TX wells, gaining 17.2 Bcfe proved.

Contango Oil & Gas Co., Houston, (NYSE: MCF) has closed the sale of substantially all of its onshore Texas assets to Houston-based, privately held Patara Oil & Gas LLC for $40 million.

The assets include 90% working interest (72% net revenue interest) and subsequent 5% overriding royalty interest in the 21 wells drilled in Panola County, Texas, in a joint venture with Patara; 100% working interest (72.5% net revenue interest) in Rexer #1, drilled in South Texas; and 75% working interest (54.4 % net revenue interest) in Rexer #2, which was spud on May 11.

Net proved reserves are approximately 17.2 billion cubic feet equivalent.

Contango will use the proceeds to fund its 2011 capex program.

Contango chairman and chief executive Kenneth R. Peak says, "We began investing in our Conterra joint venture about 18 months ago, and with this sale we will have received an 8% cash-on-cash rate of return on our Conterra investment."